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Entries in Scott Lewandowski (15)

Monday
Jun212010

Summertime Involvement

Barry Klein, Scott Lewandowski, and Bob & Jolyn Esquerre discuss keeping your members engaged in the summer:

Q: “With the summer approaching, our members want to get outside to work out. Given that we are an indoor facility, how can we integrate outdoor exercises, like running clubs, and keep our members happily paying their dues through the warm months?”

A: Keeping members engaged through the pleasant months of the summer is a huge challenge. Integrating outdoor events is certainly a great starting point but always be sure to have a backup plan in case the weather does not cooperate.

It’s important not just to create special events but also to advertise them aggressively to make sure your members know about them, so plan ahead. Things you might try are:

  • Outdoor group cycling classes: put the bikes under a big tent & rent some huge speakers.
  • Bootcamp classes: offer occasional classes that will be unlike anything you can do indoors. We did a 90-minute Memorial Day bootcamp special that was a huge hit.
  • A whole bootcamp program: Offer several classes per week at the crack-of-dawn.
  • Shift group fitness classes to earlier hours: Your members can get in-and-out programs that allow parents to train with their kids.
Also, create incentives for your members to visit during the summer. Have contests based on attendance or achieving other goals and display on-going progress so everyone knows where they stand. Give your members the right activities and incentives and you can keep them engaged until the days get shorter and the weather turns colder.

Barry Klein, Owner
Elevations Health Club
barry@elevationshealthclub.com
www.elevationshealthclub.com

Be an indoor facility that offers seasonal outdoor programming. Successful outdoor programs need to include both indoor and outdoor training days to keep your members connected to your facility during the warm months.

Running programs, triathlon-training programs, outdoor yoga, and boot camps are a few programs that can help your retention initiatives. Complement your outdoor running program with a structured indoor strength regimen or Pilates apparatus class. A triathlon-training program needs a pool and a spin studio to effectively teach technique to larger groups. Outdoor yoga and boot camp occur indoors throughout the year but offer a class outdoors if space and equipment are available.

Only allow members to participate in these programs. Allow non-members to participate at the cost of the program plus the dues rate during the length of the program. This will prevent members from canceling to participate in the program and rejoining at the completion of the program.

One last item, make sure your liability form includes all risks associated with outdoor activities.

Scott Lewandowski, Regional GM/Fitness Director
Fitness Formula Clubs
sl@ffc.com
www.ffc.com

A:Your question is a great one! We will qualify our response by listing the following quotes for you to consider:
  • "More Than just a Workout"
  • "A Place to Belong"
  • "More Life in Your Lifestyle"
  • "It's Not Fitness, It's Life"
  • "Real Professionals with Real Passion who deliver Exceptional Performance"!
These tag lines represent the branding messages [aka the value propositions] for several successful club organizations. These organizations create in the mind sets of both their actual members and their potential members a reason for them to join their clubs, remain in these clubs and because they are happy, they will refer non-members to join these clubs. These fully integrated members want to share their fantastic experiences that they have had with their friends, relatives & co-workers.

These clubs have created a dynamic club environment that utilizes club programming that make these messages come to life that is delivered by fitness professionals who are responsible for not only delivering the value propositions for their clubs, but also who have been delegated the responsibility within their job descriptions to manage the member experiences. And these experiences are not restricted to the 4 walls of the club.

These clubs have been consistently successful because they have fully integrated the members into the club's programming mix by building viable, positive relationships with the members. This enables the clubs to proactively manage the member's experiences which results in the club having the ability to proactively manage the members' life-cycle at the club.

These clubs have been able to create/position their brand in such a way that the club's value propositions transcend the 4 walls of the club. The club brand is not restricted by space/by location. These members are being guided/managed by a valuable experience.

We would like to close this response with a quote from one of our Industry Leaders/Visionary:

The name Midtown conjures up the image of a town square where people feel comfortable and can connect with friends. This sense of belonging and connection is the experience we ultimately strive to give our members.

- Steven Schwartz, November 2006.

Bob & Jolyn Esquerre
Esquerre Fitness Group International
Business Solutions Consultants
esquerre1@aol.com

Bob and Jolyn recommend these two downloads to better understand how fostering the community within your club can keep your members engaged through the summer:
  • Putting Customers at the Center of Our Business
  • How to Create and Manage a Great Customer Experience
  • Monday
    May312010

    Cash Conundrum

    Scott Lewandowski, Bill McBride, and Jarod Cogswell offer their help to a club owner who is struggling to predict membership revenue in a cash based society:

    Q: “The health club industry thrives on predicted revenue streams from contracts. Unfortunately, for us, this is not possible due to absence of a national E-commerce platform coupled with a society that still prefers cash over credit. We offer open-ended, pre-paid duration based memberships with the highest duration (annual pre-paid) offering the highest discount. This is a very uncertain and crude collection method in the sense that we don't know how many clients will renew next month since 80% plus prefer monthly package over the annual one due to lump some payment. What can we do to improve our receivables base?”

    A: Start with a membership agreement that includes personal information, length of contract, risk of liability, and the cancellation policy. Since you mention most members pay with cash, I would discourage month-to-month memberships and encourage no less than 6 month and no more than 12 month agreements with the membership rolling over into a month-to-month agreement until the member cancels in writing.

    Additionally, here are two tools to manage your account receivables and minimize the time from when you send bills and receive payment unless you hire an automated billing company.

    Create a sales analysis report that lists all of your membership types. Breakdown each membership type listing active members, membership adds, deletions, suspensions, and estimated dues for the month. Compare the report on a monthly basis watching for favorable and unfavorable trends.

    Another report is an aged trial balance listing outstanding balances of members by length of time. The report should include name, contact, amount owed, and how long since last payment.

    Lastly, a policy for your company needs to be established on when access will be denied until the unpaid balance is collected.

    Scott Lewandowski, Regional GM/Fitness Director
    Fitness Formula Clubs
    sl@ffc.com
    www.ffc.com

    A: The easiest way around this would be to creatively design various membership options that allow for installment payments (even via cash) while highly encouraging longevity. One way would be to do an annual membership with the first and last quarter paid in advance and at the end of the first quarter, they would pay for Q2 and then at the end of Q2, they would pay for Q3… the last Quarter could be used for Q4 or they could extend (but always having their last quarter prepaid as a deposit to encourage the install payments or risk losing the “deposit”). This would allow for more payment flexibility and still increase at least Q2 and Q3 renewals. Coming up with an incentive to renew for subsequent years (either using the above system on a two year basis) or adding in service incentives upon 2nd year renewal. I would suggest you brainstorm with some of your staff and some of your customers various consumer friendly options that incentivize longevity and allow for the cash payment system currently in place while honoring all laws in the jurisdictions in which you operate.

    Bill McBride, Chief Operating Officer
    Club One, Inc.
    bill.mcbride@clubone.com
    ClubOne.com

    A: This is a challenging one. Not having all of the information may be needed (# of current members, type of club, etc.), I will do my best to offer suggestions.

    First, I agree with Thomas Plummer's philosophy on monthly revenue... It does help pay the bills. However, if your attrition rate is as high as 70% (for monthly agreements), then you need to be flexible, which seems like you are doing. With that said, I'm not sure if I would offer too many options. I would suggest offering monthly and annual packages only.

    Monthly
    To address your attrition issue with this group, evaluate member usage carefully. There are a lot of programs that will help with this. We use Retention Management. If a member hasn't used the club in 4-6 weeks, the program will automatically send him/her a fitness tip and we follow up with a courtesy call and ask them if they would like a complimentary Personal Training session (or two) and/or invite them to a special event. Most members are very appreciative of the call.

    Do you have a strong new member integration program? Solid retention begins at the start of one's membership. Our hope is that a new member utilizes the club 8-12 times in the first month. We're also looking at giving their joining fee back if they utilize the club 30 times in the first 90 days. Once they are serious about their program, they are least likely to quit.

    The bottom line with monthly agreements is that you need to tighten up your retention, so that it does less damage to your business.

    Annual
    This is a little difficult because you stated that your society prefers cash over credit. I suggest giving them a little more incentive. Call it a "VIP Package". Don't charge a joining fee, give them 15-20% off dues, x number of personal training sessions and perhaps other complimentary ancillary services. Make it as attractive as possible.

    I think if you delete the quarterly and half-yearly options, you will be OK. I'm guessing that these individuals are not making a long-term commitment (same as your monthlys), therefore their retention isn't great as well. Quarterly and Half-Yearly agreements seem like short-term cash options vs. a commitment.

    Jarod Cogswell, General Manager
    ClubSport Oregon
    jcogswell@clubsports.com
    www.clubsports.com/oregon

    Monday
    Apr122010

    Training: Paid or Free?

    Bill McBride, Scott Lewandowski, Geoff Dyer, and Brad Wilkins clarify a conundrum submitted by one reader who asks, If retention in mission critical, why make people pay for even the most basic level of one-on-one training?

    Q: “If it costs far more to attract new members than it does to retain existing ones, why do most large health club chains emphasize on sales and closing techniques rather than on retaining clients through provision of cost free floor trainers? Most, if not all clubs are based on a paid-training model, but this ought to be part of the membership fee. Why the contradiction?”

    A: Member retention is the bedrock of success. If your club keeps its membership engaged, delighted and progressing with results, it does better in all other areas – sales, ancillary revenue, referrals, community awareness, etc.

    ...sales and attracting new market segments is crucial to success.
    The industry focuses on sales as a large number of members quit due to somewhat “uncontrollable” factors such as relocation, illness, injury, personal issues & financial hardship. An analogy is saving money – retention is the saving money & sales is the future earning potential. While we all like to save, without future income, many of us would spend through our savings and become broke. Sales is the growth engine. As our industry is still not attracting the vast majority of the population, with many mature clubs battling to sell more than their losses each month, sales and attracting new market segments is crucial to success.

    Some clubs do indeed use an “included service” model – typically charging a lot more per month or somewhat more with a limited number of sessions allotted per month. Some allow the sessions to accumulate and some are “use it or lose it.” The right business model for a particular club is one that works for the business and the clientele. To run a multimillion dollar club at a relatively low price point and include highly educated service trainers for free is a challenged business model for many. Others that have free training and pay training struggle with two “silos” and a very confused membership base… Why pay when I can get it for free? As well as, what is the difference in qualification and service levels?

    I do not believe there is necessarily a right or wrong approach with the various models, but I am of the personal opinion that regardless of your model, your members should be started properly on their journey and be able to get advice and support when needed as part of their membership. With that said, I would not offer on-going “free” personal training if you are offering fee based personal training (at the same dues rate) as this confuses two separate business models in the consumer’s eyes.

    Differentiating what is included in the membership and what is an extra or enhanced service should be well thought out and articulated.

    Mr. Bill McBride, Chief Operating Officer
    Club One, Inc.
    bill.mcbride@clubone.com
    ClubOne.com

    A: For a health club to be successful, the management must focus equally on membership sales and membership retention. Membership sales will continue to be a focus of a health club regardless of the club’s retention efforts.

    Retention should not be the sole responsibility of the fitness department.
    I recommend a cost free floor trainer such as a Fitness Specialist who offers fitness suggestions, coordinates fitness programming, and demonstrates new equipment. Health club owners decide not to create this position because it is an additional salary and prefer to use Personal Trainers who earn commission on paid sessions to service the members on the floor while prospecting for new clients. I agree that Personal Trainers should be interacting with members on the fitness floor to solicit new business. The dilemma is who is responsible to service members on the floor when a trainer is conducting a paid session. In the end, both scenarios have been successful for health clubs.

    I would note that the fitness team is only a piece of the retention plan. Retention should not be the sole responsibility of the fitness department. The General Manager, along with his or her department heads, should outline each department’s responsibility in enhancing the member experience. This will create the most successful retention plan for club success.

    Scott Lewandowski, Regional GM/Fitness Director
    Fitness Formula Clubs
    sl@ffc.com
    www.ffc.com

    A: All clubs focus attention on sales, it is the lifeblood of our industry.

    Member retention is AS IMPORTANT as new member sales but not all clubs track their retention or measure the activities that impact the retention of their members.

    To acquire a new member there is a marketing expense and a sales expense or commission. Most of the time these two costs added together equal $100 or more.

    After the new member has joined every month that the new member stays will add bottom line revenue, after the acquisition cost has been recovered!

    Members will stay longer if they are actively using the club, if they are properly oriented in to the club, if they “connect” with both staff and with members…the list of retention tools at our disposal is enormous.

    Providing trainers on the floor to offer advice will help, as will providing orientation clinics, or 2-3 sessions with a trainer to show the new member how to use the club and its programs and equipment. The first objective is to focus as much time and attention to member retention as we do to new member sales. It will then be easier to prioritize which retention tools will work in your organization.

    Geoff Dyer, Founder
    Lifestyle Family Fitness
    gdyer@lff.com
    www.lff.com

    A: You have asked some great questions about this wonderful industry we work in. And to answer this type of question it is sometimes a good idea to take a step back to observe the industry from a global perspective.

    The first thing to realize is that it is a large industry. In the US alone there are approximately 30,000 fitness facilities. This includes everything from recreational centers, to large chains, to small chains, to “mom-and-pop” shops, to publicly traded companies, and everything else in between. These facilities can range in sizes from a couple thousand square feet to well over a hundred thousand square feet…with fee structures ranging from a few dollars per month to well over a hundred dollars per month. The point on this quick view of the industry is to show that there are a lot of different business models out there in the industry, with different strategies and goals…and this is why the contradictions you mentioned in your question seem to exist.

    So, is member retention important? Yes it is. Do you need to manage your attrition rate? Yes you do. To what degree or effort do you attack it? Well, it depends. It depends on your model, your strategy, and your goals; it is all a numbers game that each and every one of us plays (no matter if we are a high-end low volume business or a low-end high volume business…or something in between) between membership activation, membership inactivation, facility capacity/constraints, fee structures, services, and available finances.

    So, are all clubs doing the right things in regards to retention? Probably not. The days where commercial clubs could sustain profitability with 35% – 45% attrition rates are being challenged due to the current global economic situation. New approaches like the one you mentioned in your question should be explored to enhance the members experience and increase the club’s value proposition.

    Brad Wilkins, Director of Fitness Mgt & Devt
    Cooper Fitness Center
    bwilkins@cooperfitnesscenter.com
    www.cooperfitnesscenter.com

    Monday
    Feb152010

    Balancing Programming And Costs

    Scott Lewandowski and Anne Whiteside discuss balancing group programming and costs:

    Q: “Our members love group cycling and are flocking to the classes in droves... so much so that we've dedicated a large studio with over 30 bikes and each class gets filled plus at least 10 people on the waiting list. In balancing costs vs. programming, we're stuck. Should we add another class at the risk of attendance dropping at some point and being stuck paying two instructors rather than one?”

    A: The member experience is most important and should factor into the final decision on whether you add an additional class. There are ten members not being able to participate in a class who will eventually quit your club. Remember, it costs more money to add a new member than it is to retain a current member. How about adding a few more bikes to your current studio?

    “Remember, it costs more money to add a new member than it is to retain a current member”
    If adding bikes are not an option, I would add classes. Members who participate in group exercise classes build strong bonds with your employees and other members in the class. These relationships are priceless and drive retention upwards.

    How about a seasonal group exercise schedule? By changing your schedule quarterly along with the seasons, you could remove additional classes if participation numbers begin to trend downward.

    Do you track cost per participant for each class on your group exercise schedule? The amount will identify weaknesses in your schedule and help adjust or reduce your class offerings to maximize the return on investment of your group exercise program. I recommend a goal of $3 per participant per class.

    Scott Lewandowski, Regional Fitness Director
    Fitness Formula Corporate
    sl@ffc.com
    www.ffc.com


    A: I would say add another class and advertise that you will reevaluate the class in six weeks. If attendance is high enough, keep the class, if not, then you can cancel the class without upsetting the membership and will not get stuck paying another instructor for low attendance. Make sure the instructor knows this class will be a “trial class”. It sounds to me like you will not have any problem filling another class.

    Anne Whiteside, Program Director
    Yakima Athletic Club & YAC Fitness
    anne@yakimaathletic.com
    www.yakimaathletic.com
    Monday
    Dec142009

    Non-Dues Programs And Retention

    Scott Lewandowski, Chez Misko, and Jarod Cogswell discuss discounting non-dues revenue products to increase retention´╗┐:

    Q: “I have an idea to give members a 5% club-credit on their membership dues to spend on things like nutrition advisory, personal training sessions, or even as a credit into the fee when the amount is high enough. The goal is to increase retention by supplying a higher level of service to our members. I've seen this work in retail, do you think it will work in the fitness industry?”

    A: Retention Success is based on achieving three goals: usage, variety, and relationships. Increased club usage of the member equates to increased value of your monthly dues rate. Participation in a variety of services by the member builds customer loyalty. The more activities a member experiences the more invested the member is reaching their fitness goals within your health club. Last, members join health clubs for the social component of meeting new friends and the support system offered by the staff.

    Retention Success is based on achieving three goals: usage, variety, and relationships.The proposed 5% club-credit on their membership dues to spend on additional services within your facility is a member rewards program that shows your appreciation for their business. I support all member rewards programs. The money will allow the member to receive a discount on their next service or experience a new service satisfying the variety component of the retention success.

    I recommend the 5% club-credit be a gift card. It is tangible. You also want this money to be used for a service not a credit to dues. Remember, variety. This program must be promoted to the member upon enrollment and announced proudly within the club when earned by members for continued success.

    Scott Lewandowski, GM/Regional Fitness Director
    Fitness Formula Clubs
    sl@ffc.com
    www.ffc.com

    A: Incentivizing members to participate in non-dues programs is a good idea and does improve retention. When designing an incentive program like this I would advise the following: keep it simple, make sure you can track its success, make sure the value of the program creates action, include an expiration date and most importantly - don’t do anything to devalue or affect the integrity of your membership.

    I prefer programs that reward, recognize, or show sincere appreciation to the member verses a credit, because it could be perceived to devalue your membership. If you credit me 5% every month why don’t you just charge me 5% less? Sending a new member a congratulatory card and $25 gift certificate on successfully completing the first ninety days as a member and getting a personal call to explain the various ways the member could use the gift certificate might create more good-will and a greater percentage of non-dues revenue sales.

    Whatever program you design I would suggest piloting it to a smaller group first; this allows you to make sure it is implementable and can minimizes costly mistakes!

    Chez Misko, Vice President of Operations
    Wisconsin Athletic Club Inc
    chez@thewac.com
    www.thewac.com

    A: I don't discount dues unless it's a corporate/group membership (10 or more memberships to qualify). Dues are sacred. They steer the business. They pay the bills, payroll, etc. PT and other programs are features that support retention.

    Dues are sacred.Also, I'm not sure if 5% is going to motivate someone to purchase other services. My suggestion would be to leave the dues alone, create a short-term program discount that creates a call to action. In addition, develop an incentive for your staff to sell those services.

    Here are some examples:

    • Member Offer: 10% off personal training services in the month of December... a $x savings! Offer expires December 15, 2009.
    • Staff Offer: Sell $4,000 or more in personal training this month, receive 10% of your total sales.

    Jarod Cogswell, General Manager
    ClubSport Oregon
    jcogswell@clubsports.com
    www.clubsports.com

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